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Housing Lobbyist's Reason for Opposing Tax Reform Is What's Wrong with Washington

"By raising the standard deduction you put money in people's pockets, yes, but you're not encouraging them how to use the money."

Alex Edelman/CNP / Polaris/NewscomAlex Edelman/CNP / Polaris/NewscomTax bills have now passed both the House and Senate, so lawmakers are now setting to the task of reconciling the two proposals. House Republicans are expected to vote Monday to proceed to a conference committee, which will be charged with hammering out the details of a plan that can pass both chambers.

Both bills are a mixed bag. The good news is that they'll cut the corporate tax rate from 35 percent to 20 percent, which will grow the economy and encourage investment; many Americans will also see a welcome reduction in their personal income taxes, though those cuts are set to expire after a decade. On the flipside, the tax plan will add about $1 trillion to the national debt, even after accounting for the economic growth it could unleash.

One positive part of the GOP tax plan is the doubling (or, in the Senate bill, nearly doubling) of the current standard deduction from $6,350 to at least $12,000. (The current deduction of $12,700 for married couples would increase to at least $24,000.) A higher standard deduction means all Americans get to keep a larger share of their income, tax-free, and it also helps to simplify the tax-filing process for some people who might currently itemize deductions but would choose not to do so if the standard deduction was higher.

But even something as straightforward as raising the standard deduction is facing opposition, Politico reports. Homebuilders and other housing lobbyists are worried—get this—that it lets individuals make their own decisions about how to use that extra un-taxed money.

"We're looking at the current draft plan as an assault," Jerry Howard, CEO of the National Association of Homebuilders, told Politico. "By raising the standard deduction you put money in people's pockets, yes, but you're not encouraging them how to use the money."

This represents more than just one tired lobbyist caught in an unexpected moment of candor. There's a whole worldview embedded in that cynical comment.

About a decade ago, Richard Thaler and Cass Sunstein coined the "nudge" theory: the idea that policy makers can influence behavior without explicitly mandating or prohibiting anything. Such "libertarian paternalism," as some have called it, leaves people free to make their own decisions but arranges incentives to direct choices. The federal tax code has long been full of such incentives, including the mortgage interest deduction that is so dear to groups like Howard's lobby. It encourages you, as Howard puts it, in "how to use the money" because you get a tax break for choosing to buy a home instead of making any other choice.

In some cases, this may work rather innocently to help people save more for retirement or to increase organ donations. It also helps make bathrooms less messy. But even when the theory is applied in what seem to be useful ways, there's no practical, objective way to determine what's in another person's best interest. There are, however, plenty of ways a lobbyist can twist the tax code to fit his lobby's interest.

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  • Robert||

    Cut taxes any way you can, any time you can, as much as you can. Leaving more $ in the private sector won't make it harder to pay off public debt in the future!

  • Hank Stamper||

    Except you are stealing from the future to pay for today. I just hope for a budget deal or government shutdown now that taxes will be somewhat fixed and obmacare reform is dead.

  • I am the 0.000000013%||

    I seem to remember the claim that Obama was elected on a wave of young voters. I'll guarantee they didn't turn out in large numbers to oppose Obama's agenda of increasing government spending.

    I'm not really sympathetic at the moment about them having to pay for excesses they were either actively or passively in favor of.

  • BYODB||


    I seem to remember the claim that Obama was elected on a wave of young voters.

    Yeah, they tried to float that as an excuse but if memory serves 'the youth vote' was something like 12% or less of Obama's vote total. So if we're looking to blame a group, I don't think this is the one you're looking for.

  • I am the 0.000000013%||

    Hence my second clause: 'I'll guarantee they didn't turn out in large numbers to oppose Obama's agenda of increasing government spending'...

  • David Nolan||

    Just like tribal Republicans ... of ALL ages ... never protested Dubya's even larger increase..
    Like ... oh ... STEALING from the income tax to "pay for" Medicare Prescriptions -- now that a quarter-trillion in Medicare deficits are financed from income taxes, NOT the Trust Fund.

    THOSE Republicans outspent Obama on that alone ... count the years

  • I am the 0.000000013%||

    I don't feel sorry for them either. As a libertarian, I only feel sorry for myself.

  • John Galt is back||

    You don't feel sorry for the victims of GOP profligacy?
    That's what David noted.

  • some guy||

    I think Robert was being sarcastic.

    Yeah it sucks that the GOP is only hitting one third of the anti-productive trio, leaving spending and regulation virtually untouched. This tax break will probably be good in the short term and terrible in the long term. The question is which generation gets left with the tab.

  • Robert||

    No, totally serious. Never use a deficit as an excuse to tax more.

  • John Galt is back||

    No, totally serious.

    Umm, you now TOTALLY reverse your original Entitlement Mentality.

    Never use a deficit as an excuse to tax more.

    That's not what you said, and expands your Entitlement Mentality even worse..
    "I want a tax cut, and don't give a fuck about the costs."

    How does that differ from any other Welfare Queen? It does show WHY we have a $20 trillion debt.

  • Robert||

    The more $ "the future" has (because it hasn't been taxed away from it), the easier "the future" can repay—especially if the borrowing is at US Treas. rates!

  • John Galt is back||

    The more $ "the future" has (because it hasn't been taxed away from it), the easier "the future" can repay—especially if the borrowing is at US Treas. rates

    1) You just flunked elementary school math.
    2) Why should they pay for ANY of YOUR tax cut, mooch?

  • shortviking||

    No one "pays" for a tax cut. That is leftist drivel that treats tax cuts as spending.

  • John Galt is back||

    (smirk) It means "offset" to any LITERATE ADULT..

    So you're as bi a teat-sucker as he is. "Gmme more tax cuts. I donlt give a fuck what it costs somebody elsde, because ...... I AM ENTITLED

    Leftists aren't the only side spouting drivel.

  • shortviking||

    It literally doesn't cost anyone anything when someone else has less money stolen from them.

  • John Galt is back||

    It literally doesn't cost anyone anything when someone else has less money stolen from them.

    REPEAT FOR THE ILLITERATE POSTER

    ?(smirk) It means "offset" to any LITERATE ADULT..

    You're illiterate.
    On the evidence And worse ...

    So you're as big a teat-sucker as he is. "Gmme more tax cuts. I donlt give a fuck what it costs somebody else, because ...... I AM ENTITLED

    You defemd sucking at the public teat ... AS AN ENTITLEMENT.

    Leftists aren't the only side spouting drivel.

    And it's not stolen, so spare us THAT nonsense. "Consent of the governed"

    Conclusion: You're a confirmed authoritarian, pissing all over consent of the governed, America's founding principles and several; centuries of Natural Law.

    Must I repeat it AGAIN?

  • Devastator||

    Are you on drugs?

  • John Galt is back||

    Are you on drugs?

    Liberty and self-reliance are DRUGS to your ilk?

    Unlike your crowd, I don't demand a tax cut for myself... and EXPLICITLY don't give a damn if the dollars are taken from others.

    Yours is an Entitlement Mentality, and I understand why you refuse to accept that simple fact.
    Based on elementary arithmetic.

  • Procyon Rotor||

    He's not on drugs, he's just Hihn. I wasn't sure about it the first time BUCS called him out on his new sock account, but I see it now. Congrats to BUCS on spotting it, and congrats to you, Hihn, on keeping many of your most obvious tells under control. You went almost a full week without parenthetically typing a non-verbal expression of contempt for example. I can only imagine how much self-control that took.

  • Red Tony||

    Wait it's Hihn?

    Well he's old and I'm old so I wanna challenge him to a duel in the one thing all elders know how to do, with the loser leaving the comments section forever! How about it, BULLY?

  • David Nolan||

    Red Tony,

    I was hoping you'd have something on the issue here.
    Oh well ...

  • David Nolan||

    He's not on drugs, he's just Hihn.

    Having lost on the issue .... you switch to a personal attack,.

    Typical of your ilk.

  • Mitsima||

    Except you are stealing from the future to pay for today.

    Whoa, whoa, whoa. Who is this, "you"? It's certainly not "we" who would like to see horror-flick style budget slashing to go along with those tax cuts reductions in gov't theft.

  • John Galt is back||

    reductions in gov't theft.

    It's only theft if you reject "consent iof the governed" -- freedom of association -- and severa itre

  • John Galt is back||

    reductions in gov't theft.

    It's only theft if you reject "consent iof the governed" -- freedom of association -- and several centuries of Natural Law.

    So what DO you believe? Divine Right of Kings? Modern Fascism?
    Certainbly not liberty.

  • Procyon Rotor||

    Except we don't have consent of the governed or freedom of association in this country. Which, as I've pointed out in the past, you're perfectly happy with. Tyranny of the majority is justice under your philosophy, so you think the statist status quo is just fine.

  • John Galt is back||

    Which, as I've pointed out in the past, you're perfectly happy with.

    You were full of shit then, too.
    Now ... we see WHY you fucked up so totally!

    Tyranny of the majority is justice under your philosophy, so you think the statist status quo is just fine

    ROFLMAO ... MASSIVE FUCKUP!

    I'll TRY to dumb it down to your level .. You've just equated "consent of the governed" with "tyranny of the majority" ...

    When (and if) you make it to high school ...

    and take US History ...

    you'll be taught that our founders ... wait for it, Sparky ...

    SUPPORTED "consent of the governed" ... and OPPOSED "tyranny of the majority ....RIGHT THERE IN OUR CONSTITUTION!

    He'll be TAUGHT, but can he LEARN?

    He'll now punish me AGAIN for HIS fuckup ... and latest aggression... with a new hissy fit
    Standard practice for blowhards and cyber-bullies (one is always the other)

    (sneer)

  • Procyon Rotor||

    This isn't for your benefit, because I know you won't understand it, but I feel like I've been challenged to spell out my position as precisely as I can.

    Consent of the governed is largely a nonsensical term because it doesn't resemble anything we would recognize as consent in any other context. In government, consent is presumed rather than explicit. Consent, once presumed, may not be revoked except by fleeing the country altogether. And consent may be given on your behalf by others, if only a majority of those who vote say yes. This is not real consent, and it doesn't transform an impermissible action into a permissible one. Taxation is theft because you can't refuse to pay. Without the ability to deny consent, any consent given is meaningless.

    Individuals have rights that are beyond the reach of any majority vote, and any government that wants to call itself legitimate is bound not to violate those rights under any circumstance. Our founders may have tried to write a constitution that restricted government in just such a way, but those restrictions have not been enforced. As Spooner wrote, "...it has either authorized such a government as we have had, or has been powerless to prevent it."

  • John Galt is back||

    Watch the statist flame out AGAIN … and change the subject
    REFUSES to address his shameful conflating of "consent of the governed" with "tyranny of the majority"

    This isn't for your benefit, because I know you won't understand it,

    THAT is why your ass gets nailed.

    I feel like I've been challenged to spell out my position as precisely as I can.

    FASTEN YOUR SET BELTS. HERE WE GO!

    Consent of the governed is largely a nonsensical term because it doesn't resemble anything we would recognize as consent in any other context.

    No other context involves 2.5 million people! DUH

    1) elect people to represent you.
    2) They form a convention
    3) approve or reject their proposal.
    ,

    In government, consent is presumed rather than explicit.

    RATIFICATION WAS EXPLICIT. (omg)

    Consent, once presumed, may not be revoked except by fleeing the country altogether.

    It's not presumed. And I already said THAT (leaving is your liberty).

    And consent may be given on your behalf by others, if only a majority of those who vote say yes.

    FAIL. WHY can they act "on behalf" of those others?

    This is not real consent, and it doesn't transform an impermissible action into a permissible one.

    You just refuse to accept it.

    Taxation is theft because you can't refuse to pay.

    Liar

    cont'd

  • John Galt is back||

    Without the ability to deny consent, any consent given is meaningless.

    Now you're repeating your self-proclaimed power over 350 million people!!

    Individuals have rights that are beyond the reach of any majority vote,

    THAT'S WHAT I SAID!. Also the Ninth Amendment.
    But -- unlike you -- I did not confuse power (government) with rights (people)

    and any government that wants to call itself legitimate is bound not to violate those rights under any circumstance.

    WAIT FOR IT ……
    AS DETERMINED BY WHO???

    (you crashed and now you're burning)

    ***PAY ATTENTION: Among the consent granted, was creating a judiciary, empowered it to make those judgements.

    YOU CLAIM THE POWER TO RULE 350 MILLION PEOPLE ... **AND** MAKE THOSE JUDGEMENTS.

    Our founders may have tried to write a constitution that restricted government in just such a way, but those restrictions have not been enforced.

    Only a tyrant would try to enforce it now (PER JEFFERSON)
    You don't know THAT either. Or why. Stay tuned/

    As Spooner wrote, "...it has either authorized such a government as we have had, or has been powerless to prevent it."

    HOW DOES THAT OVERRULE CONSENT OF THE GOVERNED???

    Pull up a chair and learn WHY it's obsolete.

    cont'd

  • John Galt is back||

    Part 3

    WE are the governed. When did WE consent? What did Jefferson say?

    He was in France. The Constitutional Convention had begun. The Articles had failed. The mood was to create a perpetual constitution.

    Jefferson was PISSED.

    "...no society can make a perpetual constitution, or even a perpetual law. The earth belongs to the living generation.

    What does THAT mean?

    We cannot be governed by the dead. Each generation must create its own constitution … with "consent of the ACTUAL governed."

    WHY? The Articles needed replacement after 19 years. That was his metric for a generation (at the time)

    "Every constitution then, and every law, naturally expires at the end of 19 years. If it be enforced longer, it is an act of force, and not of right."

    Force? Yep.
    Conservatives piously defend, "What the founders intended." Rule by the dead???
    Liberals know it's obsolete but promote "a living constitution" ... what THEY say.

    I say fuck 'em, BOTH authoritarians. EMPOWER THE PEOPLE.

    That means a new Constitutional Convention every 19-20 years. They MAY change nothing. But it must all be on the table.. The ONLY way to re-establish consent and ... commitment.

    I defend rights. You defending …. NOTHING … still sneering at will of the people.

    How DARE you deny the rights of people to form voluntary associations?

    Anything else?

  • Procyon Rotor||

    I'm not sure which is more impressive, your ability to totally misunderstand and misrepresent my position, or your ability to construct a position of your own that's so meandering and self-contradictory that I can't even parse it. Doesn't matter. Bravo. Well done on both counts. I'm going to sleep now. Good night and take care.

  • John Galt is back||

    I'm not sure which is more impressive, your ability to totally misunderstand and misrepresent my position

    Like Trump,. the bigger the screwup, the wackier the evasion

    So I'll call you out a FIFTH time.
    Tell me where you CLAIM I did that.

    I didn'tt think so,

  • Procyon Rotor||

    I'll leave that as an exercise for the viewer. I'm sure everyone but you can see it.

  • Elilis Wyatt||

    This viewer sees him whupping your ass, Procyon. Here and all over the page. Start yelling "Fake News." Makes the orange hair wonder look crazy, but not like a loser to his fans..

  • Mitsima||

    Jesus H Christ Mr. Hinh, how many screen names do you have? How do you keep track of them all (not very well, actually)? And to hide behind the names of Heroes, too - how very Alinski of you.

  • John Galt is back||

    MOAR AGGRESSION .... ANOTHER CONSPIRACY!!!!!!

    My stalker then returned, 14 hours later, for yet another aggression ....

    .... Making an even bigger fool of himself .....

    Now claims VOTERS NEVER REJECT TAX LEVIES .... SO THEIR POWER IS USELESS.

    PLUS ... copies my own technique ... which ALSO blows up in his face!

    NOBODY COULD INVENT SO MASSIVE A FUCKUP. CHECK THE PROOF:
    http://reason.com/blog/2017/12.....nt_7054370

    Returns for two fresh assaults .... 14 hours apart .... but he's NOT a bully and serial stalker! (sneer)

    It's not nice of me to ridicule the handicapped, But self-defense of cyber-bullying.
    Did I violate the safe space of yet another precious snowflake???
    (walks away laughing)
    .
    (Boldface so nobody misses this asshole's newest fuckups)

    Will he or he CONTINUE attacking? NEW revenge assaults? We never know in advance....
    Pity their tiny egoes.

    .

  • C. S. P. Schofield||

    The thing is, we have in the past gotten the ballot-lice in Washington to cut taxes. We haven't gotten them to cut overall spending in my adult life (and probably longer). All we can really expect to do is get taxes cut, try hard to keep them cut, and hipe that we can starve the Beast.

    *spit*

  • Mark22||

    You can't "steal from the future". People in the future are simply going to decide what these debt obligations are worth, which is probably nothing.

  • David Nolan||

    The federal gubmint will choose default .. triggering a worldwide depression worse than the 1930s ... to justify you wanting more money from my yet-unborn great-grandson ... but you "can't be stealing/"

    Then it can only be an Entitlement.

    Oh.

  • John Galt is back||

    Cut taxes any way you can, any time you can, as much as you can. Leaving more $ in the private sector won't make it harder to pay off public debt in the future

    Translation: Give me a tax cut. I don't give a fuck what it costs. The Entitlement Mentality.

    Would it be harder to pay off a much the mortgage on your home?
    Anything else?

  • Mitsima||

    Translation: Give me a tax cut.

    Translation: It's not your money, even if you did earn it, or create it, or built it, or saved it; it's my "our" money; now shut up and get back to work, Kunta.

  • John Galt is back||

    Translation: Give me a tax cut.
    Translation: It's not your money, even if you did earn it, or create it, or built it, or saved it; it's my "our" money; now shut up and get back to work, Kunta.

    ANOTHER Entitlement Mentality.
    AND a fucking liar on what I said!!!
    Typica

  • John Galt is back||

    ....Typical goober.

  • Devastator||

    This tax bill is an example of cronyism. All the tax cuts go to the wealthy. Some bread crumbs go to the middle class and even those are taken away after 5 years. It goes to show you who runs the government and who was bought off by the corps who get a 47% tax decrease. Do that to the middle class and see how much the economy booms. You'll never see it happen though.

  • John Galt is back||

    It goes to show you who runs the government

    WHO? The rich? The same folks who subsidize half the entire income income tax for those with $40-100,000 AGI?
    The diabolical bastards.

    Do that to the middle class and see how much the economy booms. You'll never see it happen though.

    Are you greedy or ignorant? Perhaps both? Don't know why the Obama "stimulus" was ALMOST as big a failure as Interstate Highways?t

    During the entire postwar years -- 1945-now. there have been only two economic booms. They each followed IDENTICAL tax cuts by Kennedy and Reagan. In JFK's words

    Across the board, top to bottom, business and corporate

    THINK.
    A booming economy requires all three legs of the stool -- consumers, employers and investors -- must have confidence.
    .
    Obama failed because people paid down debt or increased savings ... WHY?
    Widely reported They feared for their jobs. Insecure for the future. No action by employers. And if those two had confidence, they'd need investors to provide the capital for expansion and jobs creation..

    No ... factories and machinery do NOT spring from the earth like weeds. That;s why the New Deal was a massive failure -- before AND after WWII. And why the New New Deal also failed.

    Insanity has been defined as repeating the same actions over and over, while expecting a different outcome.
    (BOTH right and left do that)

  • Rhywun||

    LOL, it's going to take a lot more than a piddling mortgage interest deduction to get me to throw good money at the obscenely overheated real estate market.

  • Juice||

    Hear. Hear.

  • Ron||

    lots of people screaming about the loss of deductions on FB but they are ignoring the doubling of the standard deductions which is far greater then most of the lost deductions and even though I'm in the housing industry I've never seen why there is a need for my tax dollars to subsidize other peoples home purchases with deductions. without them maybe people will start to build what they need vs these ugly McMansions.

  • Adam330||

    But the doubling of the standard deduction comes along with the elimination of exemptions. The 2017 standard deduction is 12,700 for married filing jointly and the exemption is 4,050 per person. So a married couple was already getting 20,800 tax free, and even more if they had kids. It's at best a small benefit, and for a lot of people is actually a tax increase.

  • Calidissident||

    I was coming here to say this. The standard deduction increase is essentially wiped away for anyone (or couple with a kid) and with 2 or more it's a net reduction. To be fair, I know they are increasing the child tax credit at the same time. I don't have kids, so I'm not in any of these buckets for the moment.

    Overall it seems the net change won't be that much for most people who don't itemize despite the eye popping "doubled standard deduction" at first glance. And a lot of people who itemize will see tax increases.

  • NotAnotherSkippy||

    So aside from the 4k larger deduction it's not much of a change. Makes sense.

  • Calidissident||

    Where are you getting 4k from?

    Being generous and going off of the House data (which has slightly larger deductions), the difference the new standard deduction and the current SD + PE is $1,650 for an individual, assuming you aren't blind, disabled, or over 65, in which case the difference is $50. For a married couple with no kids, it's $3,300. For a Head of Household with 1 qualifying person, the difference is $650. For a married couple with 1 kid, it's -$750. The only one of these that is even remotely close to 4k is a married couple with no kids, a minority of taxpayers, and even that is closer to 3k. And of course, this is all deductions from your income, so the difference as far as taxes paid is the deduction times your marginal rate. For most people, that's a couple hundred bucks from this change, if it's positive at all. Considering that on paper the doubled standard deductions sounds like a much bigger boon, I don't think I was being unfair at all.

  • Calidissident||

    *And to clarify, the married with no kids amount only applies if neither are over 65, blind, or disabled. Those groups are a large share of the married with no kids (for tax purposes) group. There's a $1,300 larger exemption per person for married couples if one of those applies.

  • NotAnotherSkippy||

    It hilarious that you finally get around to noticing that margnal rates are also changing here after harping about the impact of deductions/exemptions. You also seem to think that a majority of taxpayers have multiple kids and are in brackets which are increasing.

    For a couple with no kids the deduction/exemption is 3600 higher than current law and current law has an exemption phaseout.

    For a couple with one kid current law is 12700+3×4050=24850. The new proposal is 24400+1600=26000 or 1150 more. You finally go negative at 2 kids, again not counting changes in the marginal rate.

    For head of household with one dependent it is 18300+1600-9250-2×4050=2550 MORE.

  • Calidissident||

    The entire line of discussion was about the impact of the standard deduction and personal exemption. Also, the marginal rates only change for most people in the House bill. The senate bill only changes it for the top bracket.

    I was basing the numbers off of an article that was using 2018 figures, which is why some of the math is different (such as a 13,000 standard deduction for married filing jointly instead of 12,700).

    What is the 1600 number you're using? And a lot of people have 2 or more kids.

  • NotAnotherSkippy||

    1600 is the child tax credit. You would have to demarginalize it to get the full amount and there are too many scenarios to cover that.

    And show me where on the set of real numbers lies the value "low."

  • Calidissident||

    The child tax credit already exists, though at $1000, you can't include it in one example but not the other.

    I didn't try to account for that since it's complicated as you mention (a credit doesn't work the same way a deduction does) and the thread was pertaining to the deduction/exemption levels. Also, the child tax credit isn't exactly the greatest thing in the world in the eyes of most libertarians, especially those concerned about social engineering and favoritism towards certain taxpayers versus others with the same income.

    I don't get your last sentence. I didn't use "low" as a value in this conversation, so why are you quoting?

  • John Galt is back||

    You also seem to think that a majority of taxpayers have multiple kids

    He said the exact opposite.
    But you are Skippy.

  • NotAnotherSkippy||

    And the 10% bracket was eliminated and the 15% bracket dropped to 12. And the AMT was eliminated (or extended to everyone depending on your mood).

    It's an increase for few not a lot.

    Those hurt the most are high income blues with expensive houses in high tax states. Precisely the enlightened voters who continually carp about redistribution and not paying enough in taxes (yes, a generalization but that's the point of a "generalization").

  • Calidissident||

    You do know that high income voters in blue states don't necessarily vote blue, right?

    Also, the changes of getting rid of the state income/sales tax deduction, while keeping the property tax deduction (with a 10k limit) is transparent favoritism towards states which rely more on property taxes (which tend to be red states). There's a solid argument for getting rid of or limiting the SALT deduction (though I think that should be offset for most middle-class people by lower rates or higher deductions in general). There's no reason to exempt property tax but not income or sales tax besides political favoritism.

    If you want to defend that on "well of course they're favoring their constituents" then be transparent and go ahead, but don't pretend it's some principled libertarian move.

  • BYODB||

    Do you honestly think that a majority, or even a significant portion, of filers actually keep receipts for sales tax deductions?

  • Calidissident||

    I don't, but that's not really relevant to my point. Deducting sales tax is allowed under current law if you're dedicated enough to pursue that. You can choose to deduct that or income tax, in addition to property tax. What reason is there to only allow property tax? Why is state property tax something that should be tax deductible, but income and/or sales tax are not?

  • BYODB||

    It's pretty relevant when most people don't take advantage of that right now.

    It's a difference because it's tracking literally thousands of purchases instead of one big purchase.

    Most people aren't going to do sales tax deductions, but virtually everyone will try to take the deduction on a house. Why? Because one of them is so much easier to take that it's a no brainer whereas the otherwise is a tracking nightmare.

    I don't care how much you incentivize people to take that sales tax deduction, only a crazy few will bother. And make no mistake, the government always knew that was the going to be the case.

  • Calidissident||

    If they were just getting rid of the sales tax deduction, I could buy that they were doing so based on practicality and low usage. But they're also doing away with the income tax deduction, which is very easy to track. There's no reason why property taxes should be deductible but not income taxes.

  • BYODB||


    But they're also doing away with the income tax deduction, which is very easy to track. There's no reason why property taxes should be deductible but not income taxes.

    There we're somewhat in agreement, and I'll admit I'm not a fan of that. If they're going to kill the income tax exemption, all exemptions should be killed. I would be in favor of that, as it would at the very least make it harder to sell tax increases (and reduce the coercive power of the state by a huge margin, if done across the board for business and individuals).

    If people feel it, maybe they'd be less likely to be generally for them all the time. It does feel something like a self-inflicted wound, but honestly that's about the sum of what it is. It's a reason to take stock and say 'maybe we don't need all this spending'.

  • Hunthjof||

    The people who are likely taking that deduction are people making high value purchases. I be they find that the people bothering with that deduction are the 1% they claim get the benefit of this bill.

  • NotAnotherSkippy||

    And that explains the supermajority in CA and the majorities in NYC, NJ and IL, right?

    You seem to be confusing me for someone who favors deductions that you don't. Please explain why you think rates should be further offset for those poor middle class who are already getting a disproportionate share of this tax cut. There's no reason to favor one set of income over another, but that populist appeal seems to be what passes for "principled libertarianism" these days.

  • Calidissident||

    Do you think most people in those states are making huge amounts of money? The state legislatures would look a lot of different in many states if rich people were the only ones voting. I'm not saying they'd all be solidly Republican but they'd generally be much more balanced at least.

    I'm just pointing out the hypocrisy of the plan. You've been very reluctant to even acknowledge the bad parts of the plan.

    Disproportionate share relative to what? I was just saying that I want to minimize the number of people who get their taxes increased, how is not principled libertarianism?

  • NotAnotherSkippy||

    Do you deny that coastal cali votes blue? Manhatten? Seriously?

    The vasy majority don't get their taxes increased. I can list all sorts of things I don't like about the plan: it retains carried interest, it retains SALT for corporations, the pass thru changes are a mess and will result in restructing just for tax purposes.

    You've been reluctant to talk about any advantages of the plan.

    Disproportionate relative to what? Umm, their actual SHARE. That's what disproprtionate MEANS. This tax cut is progressive. The more you make the smaller your cut, and the biggest cut is right in the middle of the income distribution.

  • Calidissident||

    Again, you do realize that not everyone in coastal Cali is making hundreds of thousands of year? Or Manhattan? There's also a pretty big difference between SF and Orange County or San Diego (even more so if you look at the sub-presidential level). There's are plenty of rich Republicans in California, they're not all Zuckerberg Democrats.

    I like the corporate tax rate reduction. I actually do like many of the simplification measures in a vacuum. I don't like the debt bill and the manner in which they've gone about selectively simplifying in ways that clearly benefit their donors and base versus everyone else. Such as keeping the SALT deduction for corporations, as you mention.

    I was asking if you were comparing to share of taxes paid, income, or both. I'd welcome a source, not because I disbelieve you, but because most of the data I've come across isn't parsed in a way to determine this.

  • NotAnotherSkippy||

    And I would add that NJ and NY are hardly red bastions and CA is hardly a low property tax state given its inflated property values. Median property tax in texas was 1.81% last year and median property tax rate in cali was .74%. Care to know the differencr in actual property taxes paid? 2275 for texas and 2839 for CA. So presumably you're now upset that cali is going to benefit from the retained 10k deduction for than texas, right?

  • Calidissident||

    Property taxes are a much greater share of state taxes in red states on average. Thus, relative to the current system, keeping a property tax deduction but eliminating the income tax deduction is much more favorable to red states generally. Getting rid of all SALT deductions would still favor red states since they tend to have lower taxes, but to a significantly lesser degree. Surely this can't be too difficult for you to grasp, and the political motivation here is obvious?

    All I'm saying is that if you're going to allow people to deduct up to $10,000 in state taxes, you should be consistent about it and not only favor the type of taxes that form the bulk of the state tax bill for most of your base. I'm not saying it isn't smart politics.

  • NotAnotherSkippy||

    And that would matter if the property tax deduction were based on percentage of state revenues derived from it. Back here in reality it isn't, sp what exactly is your point? Oh, you think it's smart politics that favors red states. One problem with that: I just showed that the deduction is larger for cali than texas. So much for that narrative.

  • Calidissident||

    I'm not sure how much more clear I can make this. I'll try to be simple:

    Repealing the income tax deduction does not hurt most Republicans much, because generally speaking red state voters don't use this deduction much.

    Repealing the property tax deduction does hurt a lot of Republicans, because it is used quite a bit by red state voters, as a lot of red states use property taxes for most of their revenue.

    Notice how this is all a simple equation involving incentives for Republicans, that has nothing to do with what the average property tax bill is in Texas vs. California?

    If the concern is about people benefiting too much from the deduction, that's a reason to eliminate it or lower the cap. Why should someone who pays $10k in property taxes, whether in California or Texas, get to deduct that, but someone who pays $10k in income taxes while renting cannot deduct those taxes? I'm not sure why you can't just admit that it's shitty political favoritism and that the bill would be better off being consistent. There's no principled motive here.

  • BYODB||

    Yeah, it's a tax increase for some and a tax cut for some. I'm not sad to see exemptions go away, but I'm not sure doubling the deduction was the right move. I've thought about it a lot, and I've decided paying more in taxes personally is probably worth the trade-off for a far simpler tax code.

    I am wondering, though, if they're getting rid of the plethora of exemptions does this mean that the tax code will honestly fit on one page? Something tells me the full story hasn't been reported when it comes to the code, because last I saw it was somewhere around 75,000 pages.

  • BYODB||

    Of course, this assumes that a significant portion of the tax code relates specifically to income taxes but I can't say for sure what percentage of it is income tax vs. other taxes. I'm guessing the income tax portion is a minority portion of the overall code?

  • Quo Usque Tandem||

    I've long heard that the McMansions will be white elephants, and maybe this is it. There are gong to be a lot of high rolers not happy about 1] losing the deduction that they bought the ugly big assed house for in the first place [after ego gratification] and 2] the consequent loss of property value. Cry me a river.

  • some guy||

    Nobody buys a big house for the deduction or gives a bunch to charity just for the deduction. These things only affect decisions at the margins. If you end up with a big house, you were already going to buy a big house. The deduction just let you buy 10% larger or whatever.

  • BYODB||

    ^ This. You would need to be a special kind of stupid to buy a house specifically for a mortgage deduction.

  • Ron||

    I have several clients who do just that though ,build or buy based on deduction and in California some other local tax purposes. i won't say its smart but a lot of them do

  • BYODB||

    I assume that they probably would have done the same thing, only smaller, though? Or are you saying the entire project only happens because of the deduction?

    I'm honestly curious if there's any good reason to do something like that...I'm definitely no expert but it seems like a crazy move. If lots of people are doing it, perhaps there's some hidden upside.

  • Ron||

    there is no hidden upside they assume they can write off their entire interest rate which they can't and end up paying far more to the banks than any tax savings they may think they get

  • Mitsima||

    You know what? Strip all deductions. Let's make things, "fair". Let everyone enjoy the misery together.

    Only when people start feeling the sting of the whip on their own flesh will we finally get real change in D.C.

  • tlapp||

    Yes we've heard the speeches on government not picking winners and losers, someone needs to put it in this guy's face and let them know we mean it.

  • Hugh Akston||

    The federal tax code has long been full of such incentives, including the mortgage interest deduction that is so dear to groups like Howard's lobby. It encourages you, as Howard puts it, in "how to use the money" because you get a tax break for choosing to buy a home instead of making any other choice.

    All true, but don't you dare call it 'welfare' just because it's a targeted government benefit intended to buy peoples votes by helping them financially.

  • John Galt is back||

    YESS!
    And middle-class welfare is the largest by far. They (we) are rewarded for supporting politicians, right and left, who expand middle-class programs paid by somebody else.

    "Democracies prosper until the majority learns how to vote itself ever-larger subsidies from the public treasury, paid for by taxes on others.

    Politicians have robbed us, in the middle-class, of perhaps our greatest virtue - self-reliance.

  • Juice||

    You're not encouraging the money to flow toward us.

  • Billy Bones||

    This is why I have always favored a flat tax, or more specifically, a consumption tax. Our tax codes are not only to generate revenue for our government, but also, and very importantly, to exert control over our behavior. I am personally tired of subsidizing other people's homes, electric cars, children, etc, etc. Can someone please explain how paying a mortgage is any different than paying rent (other than eventual ownership)? If we are going to subsidize housing for individuals, why not for all individuals? People should be able to deduct as much from paying rent as paying a mortgage. And this would go a long way to assisting low-income families who may find it difficult to save for a down-payment (by allowing them to deduct rent payments). BUT, bank and housing lobbyists would never allow something like that.

  • Quo Usque Tandem||

    And that get's a big HARRUMPH from the housing lobby. And probably some accusations of being so against the American dream as to be treasonous, to boot.

  • NotAnotherSkippy||

    Yup.

  • BYODB||

    One person's rent is another person's income, and it gets taxed both ways.

  • Ron||

    the interest payed on a home mortgage is the banks income so why deduct for that since the bank is taxed?

  • BYODB||

    A bank is not a person, but I would tend to agree with you that it's the same thing in principle.

  • John Galt is back||

    the interest payed on a home mortgage is the banks income so why deduct for that since the bank is taxed?

    The lender gain is totally irrelevant -- whether a corporation or person. .
    The most obvious example is your pay check. It's taxable to you, and a deduction for your employer.
    For a business, EVERY business expense is deductible -- and also taxable to the recipient.

    In this case, the interest was originally deductible as an expense of acquiring ANY "taxable" property. Home-sale profits were also taxable as a capital gain -- until a special loophole exempted the middle class from the tax ... just one MANY middle-class loopholes, which is why they (we) barely pay any income tax at all.

  • Quo Usque Tandem||

    Gore that ox!

  • John Galt is back||

    This is why I have always favored a flat tax

    You favor a massive tax increase on the middle class? WHY?

    Progressive tax rates subsidize roughly half the ENTIRE share of the federal income tax for gross incomes between $40-100, 0000. Eliminate that and who pays for it -- the French? Nope. The middle class.
    It would never happen anyhow, Too fucking stupid. That's why the GOP abandoned it (silently) under Dubya, so they could keep shoveling more subsidies to buy middle-class votes.

    a consumption tax

    That's even worse!!!! Are you not aware that the rich "consume" very little of their income? Forbes documented that the middle-class consumes it's ENTIRE income (include auto loans and other debt.) Proof

    So you want a MASSIVE tax cut foir billioaniares -- paid entirely by higher t\axes on the middle class!

    I am personally tired of subsidizing other people's homes, electric cars, children, etc, etc

    But you'll gladly accept a much larger subsidy for yourswlf ... from Gates, Buffet et al.

    Or you've been flim-flammed. Liberals offer free stuff. Fiscal conservatives offer free tax cuts..
    That's why it's still true: Left-Right=Zero,

  • John Galt is back||

    A higher standard deduction means all Americans get to keep a larger share of their income, tax-free,

    And how would that work?
    (he has no idea, likely never pre[erred his own tax return)

    including the mortgage interest deduction

    Also wrong. ANY interest is deductible, on funds "invested" to acquire a "taxable" asset (like a home, or stock, where profits and losses affect taxable income)

    The real problem is the MASSIVE middle-class gravy train, when lower-value homes were exempted from capital gains taxes. Part of the Pander Bears, in both parties, bankrupting us to stay in power. The rich now subsidize half the entire tax burden for $40-100,000 gross income, plus 30% or so of Medicare (Bush was the worst of the three priors).

    It helps to understand the actual tax code, and its consequences.

  • billdeserthills||

    Why should corporations pay less taxes than poor people do?

  • Michael Hihn||

    Why should corporations pay less taxes than poor people do?

    Was it Daily Kos that bamboozled you so badly.

    Here are average rates.

    0% Poor
    8.3% Core middle class ($40,000-100,000 AGI)
    27% NET corporate rate.(of 35%)
    28% one million and up personal

    Corporate profits are taxed twice.-- but only large corporations, since (mostly) small-medium ones are loopholed our of the corporate income tax.

    Any corporation's tax is paid by ... it's OWNERS ... also called SHAREHOLDERS.
    Corporate profits are taxed twice. First to the corporation, Again when the remainder is merely distributed to the owners.

    This is exactly the same as taxing your paycheck when it's prepared, then again when its cashed or deposited.
    Are YOU taxed twice? The you're being subsidized by corpiorations and the rich! (Which you are anyhow)

    Did I mention we're the ONLY country that taxes corpiorare profits twice? Those social welfare states you love so much don't tax dividends. They KNOW what their US Komrads refuse to admit

    So ... no offense, but who flim-flammed you so totally?

    Anything else?

  • mpercy||

    According to the CBO report "THE INCIDENCE OF THE CORPORATE INCOME TAX"

    A corporation may write its check to the Internal Revenue Service for payment of the
    corporate income tax, but that money must come from somewhere: from reduced
    returns to investors in the company, lower wages to its workers, or higher prices that
    consumers pay for the products the company produces. Understanding the mechanisms
    through which those tax burdens are transferred is crucial in determining the
    economic effects of the corporate income tax.

    Although economists are far from a consensus about exactly
    who bears how much of the burden of the corporate income tax, the existing studies
    highlight the significant types of economic mechanisms as well as the empirical
    estimates necessary for further quantifying the burdens. CBO's review of the studies
    yields the following conclusions:

    o The short-term burden of the corporate tax probably falls on
    stockholders or investors in general, but may fall on some more than
    on others, because not all investments are taxed at the same rate.

    o In the very long term, the burden is likely to be shifted in part to
    labor, if the corporate tax dampens capital accumulation.

  • John Galt is back||

    And most stock is owned by employee pension plans -- which means THEY pay the corporate income tax.
    And liberals have been screwing them for decades.

    NONE of that come close to justifying today's GOP tax bull (not a typo)

  • mpercy||

    It's not a revenue problem, it's a spending problem.

    And even spending cuts are really necessary (for certain values of necessary).

    Looking at the historic revenues vs expenditures, it seems we could fix this deficit problem by simply having the federal government NOT increase spending for about 5 years. Just hold spending at the current ~4T for about 5 years--surely the government we have right now is plenty--and give revenues a chance to catch up.

    In other words, the revenue from this year would have covered the spending level 5 years ago. The revenue from last year would have covered the spending from 6 years ago. The spending this year would be covered by revenue 5 years from now.

    Sure it's a bit simplistic and there are other factors in play, but if we can't even get Congress to stop increasing spending, we'll never get them to actually spend less.

  • John Galt is back||

    NOTHING will work unless we give direct control of total spending (but arms-length) to voters.
    Libertarians had several proposals to do that .. before the anti-gubmint goobers destroyed the movement.
    Nick Gillespie says the libertarians with workable policy solutions and obsolete. He's correct, and all Americans now suffer for that. (Which he helped cause).

  • Mitsima||

    ... direct control of total spending (but arms-length) to voters.

    Funny how that never works. Funny how the bigger the problem the fewer people vote meaning the few rule the many. Funny how 'leaders' always step in to 'represent' voters to 'counter' those few. Funny how often those two positions are alike. Funny how many times I can use single quotes in a single paragraph. Funnier still will be the raving stream of obscenities 'John Galt' will offer as an 'argument'.

  • John Galt is back||

    Funny how that never works.

    VOTERS HAVE NEVER REJECTED A TAX LEVY???

    funnier still will be the raving stream of obscenities 'John Galt' will offer as an 'argument'.

    (lol)

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